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Analysts bullish on Adani stocks as group Q4 profit tops Rs 9,000 crore
The Adani group reported double-digit profit and sales growth in the recently concluded March quarter of financial year 2022-23 (Q4FY23). Data from Ace Equity showed that the combined net profit of the 10-listed Adani group firms surged 17 per cent year-on-year (YoY) to Rs 9,093.97 crore in Q4, from Rs 7,797.71 crore a year ago. The combined net sales of the group grew 12.16 per cent YoY to Rs 81,219.42 crore during the quarter.
With a growth of 319.80 per cent, Adani Green Energy topped the list of companies in terms of net profit. The bottomline of the company jumped to Rs 508 crore in Q4FY23 from Rs 121 crore in Q4FY22.
It was followed by Adani Enterprises. The bottom line of the flagship increased 137.40 per cent YoY to Rs 722.48 crore, while its net sales jumped 26.06 per cent YoY to Rs 24,865.52 crore in Q4FY23.
Vinit Bolinjkar, Head of Research at Ventura Securities, said of Adani Enterprises: “All the incubating businesses of Adani Enterprises are progressing nicely. The airport business, which may demerge in the next 3-5 years, also looks promising. Its growth trajectory is on track. The stock can be a multi-bagger over the next 3-5 years.”
Group firms Adani Transmission, Adani Total Gas, Adani Power, and Adani Ports posted 69.63 per cent, 20.74 per cent, 12.85 per cent and 5.10 per cent YoY rise in net profit, respectively, during the quarter under review.
In an interaction with Sakshi Batra of Business Today, Bolinjkar added that his firm was also bullish on Adani Transmission, Adani Ports, and Adani Green.
On Adani Ports, ICICI Direct, said, “Adani Ports’ Q4FY23 adjusted numbers were largely higher than our estimates on the profitability front. However, due to an exceptional expense of Rs 1,273 crore (led by a non-cash impairment generated by sale of Myanmar port asset), PAT (profit after tax) was lower than estimates. The FY24 guidance includes cargo volumes of 370-390 MMT and revenue and EBITDA in the range of Rs 24,000-25000 crore and Rs 14,500-15,000 crore, respectively. Net debt to EBITDA is expected to decline to 2.5 times (x) from 3.1x and capex at Rs 4,000-4,500 crore.”
JM Financial raised the target price for Adani Ports to Rs 850 (from Rs 800 earlier). “The management indicated port volume of 370-390mnt for FY24 (9–15 per cent YoY) while maintaining its FY25 volume target of 500 million tonnes. It maintained revenue (Rs 24000 crore-25000 crore), EBITDA (Rs 14,500 crore-15,000 crore), capex (Rs 4,000 crore-4,500 crore) and debt reduction guidance for FY24. We raise our estimates by up to 3-4 per cent to reflect Q4FY23 performance and outlook,” JM Financial said.
At the other end, the bottom lines of NDTV, Adani Wilmar, ACC, and Ambuja Cements declined 97.56 per cent, 60.05 per cent, 40.54 per cent, and 2.11 per cent, respectively, on a YoY basis.
Ruchit Jain, Lead Analyst at 5 Paisa, said, “Adani group stocks are moving on the news for the past few months rather than technicals. It is difficult to guess the short-term momentum as far as Adani group stocks are concerned. However, we like Adani Ports and Ambuja Cements. Price-wise correction in Ambuja Cements seems over. These recommendations are for 6 months and above.”
VG